Bill  C-377 – An Act to Amend the Income Tax Act PRIVATE CONSERVATIVE MEMBER’S BILL

Bill C-377 would create unnecessary, bureaucratic red tape for government, businesses which manage employee pension and benefit plans and unions.

 

  • Bill C-377 would create a huge government bureaucracy to process the public disclosure of union expenditures of over 25,000 unions, locals and labour organizations. But it is unnecessary because union members already have access to union financial reports through membership meetings and upon request, and most provinces and the federal government already have reporting laws for unions.
  • Meeting C-377’s onerous obligations will be a difficult and time consuming task, both for reporting andadministration. Businesses like insurance companies that administer pension and benefit plans would have significant additional reporting, some of it duplicating existing regulatory requirements with which they must already comply. Adding additional management expenses to pension plan administration would burden already struggling pension plans.

Bill C-377 is unnecessary, bureaucratic red tape that would be very expensive for government to administer, would intrude on privacy and may be unconstitutional. It should not proceed.

 

  • Bill C-377’s reporting bureaucracy will be very costly for the federal government to set up and administer, for employee pension and benefit plans, and unions and labour organizations that represent over 4 million Canadians. Those costs will all have to be paid by ordinary taxpayers.

Bill C-377 would wrongly intrude on the privacy of individuals, businesses, employers and unions.

  • Bill C-377 would wrongly be a major intrusion on individual privacy by forcing the disclosure of such payments as dental, vision, drug, life, health insurance and pension benefits – even the details of widows’ survivor benefits – for over 4 million unionized Canadians!
  • Payments made to small, medium and large businesses providing services to over 25,000 unions, union locals and labour organizations – including rates and fees and other private commercial information – would also be published.

Bill C-377 is discriminatory, singling out unions and union members for unfair treatment under the law.

  • Bill C-377 applies only to unions and excludes professional organizations such as bar associations and medical associations whose members are also able to deduct professional fees from their taxes, just like union members.
  • Bill C-377 violates the privacy of over four million Canadians and their families just because they are union members. The bill would make all pension plans and health and welfare plans that cover unionized workers turn over to the government the personal and private details of payments to individuals. The Government would then publish those details on a public website. Canadians lucky enough to belong to pension plans and health benefit plans that don’t cover union members won’t have their personal privacy breached in such a manner. Why is some Canadians’ personal privacy worth protecting and others not?

 

 

 

 Bill C-377 may be unconstitutional legislation that will violate provisions of the Canadian Charter of Rights and Freedoms.

  • The Canadian Bar Association says that Bill C-377 is “problematic from a constitutional and a privacy perspective” and that it “has the potential to invite constitutional challenge and litigation”. Why pass legislation that Canada’s leading legal experts already believe may be overturned by the courts?

After heavy criticism that the Gun Registry wasted millions of taxpayer dollars, early estimates on the implementation of Bill C-377, forecast a cost, to Canadian taxpayers, of millions of dollars.

Excerpt from Hansard (the name of the printed transcripts of parliamentary debates); a point of order raised in the house November 22, 2012 by Alexandre Boulerice.

Mr. Speaker, I rise on a point of order regarding Bill C-377, An Act to amend the Income Tax Act (requirements for labour organizations), introduced by the member for South Surrey—White Rock—Cloverdale. The Official Opposition did not raise this particular point of order on the bill prior to this point, however, during consideration of the bill at committee, the issue of new spending was raised, and I now want to bring that to your attention.

It is my opinion that the bill contains provisions which would require new spending for purposes not currently authorized in statute and therefore C-377 should be accompanied by a royal recommendation. As you know, Standing Order 79 prescribes that the House shall not adopt or pass any bill for the appropriation of any part of public expenditures without a royal recommendation. O’Brien and Bosc, in the second edition of “House of Commons Procedure and Practice” identify two types of bills which confer parliamentary authority to spend and therefore would require a royal recommendation. The second one is of interest in this case: “bills which authorize new charges for purposes not anticipated in the estimates”. They go on by saying that the charge imposed by the legislation must be “new and distinct”; in other words, not covered elsewhere by some more general authorization. I believe it is exactly the case with bill C-377.

Clause 1(4) of Bill C-377 requires that: « the information contained in the public information return referred to in subsection 149.01(2) shall be made available to the public by the Minister, including publication on the departmental Internet site in a format that allows for word searches to be performed and for cross-referencing of data».

These provisions would require the expenditure of public funds in a manner and for a purpose not currently authorized. Mr. Speaker, this means that “new and distinct” funds would need to be authorized to give the Canada Revenue Agency the ability to properly take on this “new and distinct” work. Even in the most recent estimates tabled just weeks ago, there are no line items that would account for the kind of work that C-377 would mandate. There is in fact no indication that the Canada Revenue Agency had planned that this bill would become law when the Supplementary Estimates were published.

To prove that these are new and unauthorized expenditures, it is important to note that the CRA is not and has not been engaged in union reporting. Prior to its amendment, the Corporations and Labour Unions Reporting Act required financial reporting by labour unions. However, this information was not provided to the Canada Revenue Agency, but rather to the Chief Statistician of Canada. Hence, the Canada Revenue Agency has never and does not currently conduct any similar work for unions.

During the 2nd reading of Bill C-377, the sponsor of this bill insinuated that the clauses included in this bill were similar to those that were enacted for charities since 1977. Mr. Speaker, the information that is asked of charities and processed by the Canada Revenue Agency has nothing to do with the information asked of labour organizations in C-377. There is no comparison. The program regarding charities requires less information to be disclosed and less data to be published by the Agency. Yet, this program costs over 33 million dollars per year and requires over 300 full-time employees.

If C-377 passes, the Canada Revenue Agency will have to establish a completely new division that will represent an entirely new and complex layer of government bureaucracy. Bill C-377 will require an entity that will administer and enforce its provision. The bill is written such that it includes all labour organizations and labour trusts in Canada, which will total approximately 25,000 filers. There will be the costs of training union officers, who will be completely unfamiliar with the new forms, but mostly, there will also be the costs of processing all the information coming from these 25, 000 filers. None of these costs can be considered part of any anticipated estimates for CRA, which is the burden required by the O’Brien and Bosc citation I read earlier, in order to avoid the requirement of a royal recommendation.

In addition to the type of new costs that C-377 will impose on CRA, Mr. Speaker, it is also worth spending a moment on the magnitude of those costs. In committee, Professor John Logan from San Francisco State University compared the provisions in Bill C-377 to the Labor-Management Reporting and Disclosure Act (LMRDA), created in 1959 in the U.S. It is a similar reporting regime which requires labor organizations to file annual financial reports with the U.S. Secretary of Labor. The reporting requirements for unions under C-377 are more detailed and disaggregated than under the LRMDA in the United States. Given this, we should expect ongoing costs for C-377 to be at least as high, but probably much higher, than those of the LMRDA in the United States. For the fiscal year of 2011, the Office of Labor-Management Standards oversaw reporting by approximately 25,000 American labor organizations with a budget of $41.3 million.

Finally, the provision of C-377 asking the minister to make available to the public the information collected will incur other new expenditures. The department’s website does not currently allow for the cross-referencing of data, as prescribed by Clause 1(4) of this bill. To implement C-377, the government will hence have to invest in costly systems capable of processing tens of thousands individual reports containing thousands of separate transactions.

Mr. Speaker, for all these reasons, I think you will agree that the provisions in bill C-377 would require the expenditure of public funds in a manner and for a purpose not currently authorized and I therefore submit that it requires a royal recommendation. For the benefit of your review, I will provide you with the testimonies from the study of C-377 in the Finance committee. Please note that the Canada Revenue Agency has been ordered by the Finance committee to answer questions on these “new and distinct” funds. I believe that their answers will prove that C-377 requires a royal recommendation. I will also provide you with these answers as soon as they are available.

Mr. Speaker, the government has been trying to hide from their ownership of this bill by putting it in the hands of the backbench MP from South Surrey—White Rock—Cloverdale, but their efforts have truly been a comedy of errors. You will remember that you have already had to drop this member’s first effort at a Private Members’ Bill from the order paper after the compelling point of order that the Official Opposition raised last fall, and with which you agreed, Mr. Speaker. But following the testimony we heard at committee, there can be little doubt that this bill does require a royal recommendation in order to be deemed votable at 3rd Reading, and I submit that the government will either need to own up to this blatant attack on Canadian workers from every region in this country, or let this bill drop into the legislative dustbin where it belongs